I have heard of people washing titles in other states. Delaware or another oddball east coast state comes to mind..?
As far as I know it is true under certain circumstances,
My neighbor had her car stolen and more than a year later it turns up in a parkling lot, missing the battery, antenna and gas cap. The fuel pump had died and the car was just left in a parking lot, for quite some time judging by all the dirt on it.
She bought it from the insurance company as a salvage title (it had belonged to her father) and had it repaired and cleaned up. When she went to register it she was told that since it was a stolen vehicle she could get it on a standard title, no salvage. This was a mid eighties sedan so it was not worth much to begin with.
So it appears that a stolen car that is recovered after being written off can be.